EXHIBIT 10.19
PROMISSORY NOTE
$209,250.00 Exton, PA
September 10, 1996
FOR VALUE RECEIVED, Fernando C. Colon-Osorio, an individual residing in
the State of Massachusetts (the "Maker") hereby promises to pay to the order of
CHEMICAL LEAMAN CORPORATION, a Pennsylvania corporation (the "Holder"), at such
place as the Holder may designate from time to time in writing, the principal
sum of Two hundred nine thousand two hundred fifty dollars ($209,250.00) in
lawful money of the United States of America, together with interest on the
outstanding principal balance hereunder as hereinafter provided. This Promissory
Note is made in connection with the purchase by Maker and the sale by the Holder
of shares of the common stock of the Holder (the "Shares") pursuant to the terms
of a Stock Purchase Agreement (the "Agreement"), dated the date hereof, by and
among the Maker and the Holder. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Agreement.
1. Payments of Interest and Principal. Payments of principal plus
interest shall be payable in accordance with the terms hereof. If not prepaid in
full prior thereto, the outstanding principal balance hereunder shall be paid in
full on the tenth (10th) anniversary of the date of this Note (the "Maturity
Date"). Interest shall be payable on the unpaid principal hereof outstanding
from time to time at a rate equal to 7.25% per annum. Interest shall be payable
annually, in arrears, commencing on December 31, 1996, and continuing each year
thereafter, until the Maturity Date, with the final installment of interest, and
any other accrued and unpaid interest hereon, payable on the Maturity Date.
Interest shall be calculated on the basis of actual days elapsed over a 365-day
year and shall be payable until the Maturity Date or until this Note is prepaid
in full pursuant to the terms set forth below. All amounts payable hereunder
shall be paid by the Maker in lawful money of the United States of America, by
check or wire transfer (at the Maker's option), or any other method approved in
advance by the Holder at the place designated by the Holder in writing to the
Maker, in immediately available and freely transferable funds at such place of
payment. Notwithstanding anything herein to the contrary, the effective rate of
interest hereunder shall not exceed the maximum effective rate of interest
permitted by applicable law or regulation.
2. Prepayments.
a. The Maker may prepay at any time all or any portion of the sums
due hereunder without penalty or premium.
b. In the event that, from time to time, the Maker (or any person
to whom any of the Shares are transferred in accordance with Section ll(e) of
the Agreement) sells, transfers or conveys all or any portion of the Shares for
consideration, including without limitation to the Holder, the Maker shall
immediately thereafter prepay this Note to the extent of the net proceeds
realized by the Maker (or such other seller) upon such sale, transfer or
conveyance. For purposes
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hereof, "net proceeds" shall be defined as the gross proceeds realized by the
Maker (or such other seller), less only reasonable attorneys' fees and other
customary and usual transaction costs incurred by Maker (or such other seller)
in connection therewith.
c. In the event that, from time to time, the Maker (or any person
to whom any of the Shares are transferred in accordance with Section 11(e) of
the Agreement) shall receive cash dividends in respect of the Shares, the Maker
shall immediately thereafter prepay this Note to the extent of such dividends
received by the Maker (or such other seller).
d. Any prepayment hereunder shall be applied first to any accrued
and unpaid interest and then to principal in the inverse order of the due dates
of the installments thereof.
3. Events of Default. The occurrence of one or more of the following
events shall constitute an event of default hereunder (an "Event of Default"):
a. should there be any default in the payment of any installment of
principal and/or interest on any day whereon the same is payable as above
expressed, including without limitation, a mandatory prepayment pursuant to
Sections 2(b) or 2(c) hereof, and such default shall continue for a period of
five (5) days after written notice thereof from the Holder to the Maker; or
b. in the event that the Maker (i) makes an assignment for the
benefit of creditors, (ii) admits in writing his inability to pay his debts as
they become due, (iii) files a voluntary petition in bankruptcy, (iv) is
adjudicated as bankrupt or insolvent, (v) files any petition or answer seeking
for himself any relief under laws relating to reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law, or regulation, (vi) files any answer admitting
or not contesting the material allegation of a petition filed against the Maker
in any such proceeding, or (vii) seeks, consents to, or acquiesces in, the
appointment of any trustee, receiver, or liquidator of the Maker or of all or
any substantial part of the properties of the Maker; or
c. if, within 60 days after the commencement of an action against
the Maker seeking any relief under laws relating to reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any
present or future statute, law or regulation, such action shall not have been
dismissed or all orders or proceedings under such action affecting the
operations or the business of the Maker stayed, or if the stay of any such order
or proceeding shall later be set aside, or if, within 60 days after the
appointment without the consent or acquiescence of the Maker of any trustee,
receiver, or liquidator of the Maker or of all or any substantial part of the
properties of the Maker, such appointment shall not have been vacated.
4. Remedies. Upon the occurrence of any Event of Default, the entire
unpaid principal sum hereunder plus any and all interest accrued thereon plus
all other sums due and payable to the Holder hereunder shall, at the option of
the Holder, become due and payable immediately. In the event that legal
proceedings are instituted to collect any amount due hereunder, the Maker agrees
to pay the Holder, in addition to the amount of the unpaid balance
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of principal and interest, all costs and expenses of such proceedings, including
reasonable attorney's fees. The remedies of the Holder provided herein and in
the Agreement, and the warrants of attorney herein or therein contained, shall
be cumulative and concurrent, and may be pursued singly, successively and
together at the sole discretion of the Holder, and may be exercised as often as
occasion therefor shall occur and the failure to exercise any such right or
remedy shall in no event be construed as a waiver or release of the same.
5. Non-Recourse. Notwithstanding the face amount hereof, or any other
provisions herein or in the Agreement, the Maker shall only be personally liable
under this Note for (a) an amount not to exceed twenty percent (20%) of (i) the
original face amount hereof, plus (ii) the aggregate amount of any interest
owing to the Holder from time to time hereunder, and (b) any amounts required to
be prepaid pursuant to Sections 2(b) and 2(c) hereof, and the Maker shall have
no other personal liability on account of this Note; provided that, in the event
that the Maker shall sell, transfer or convey all of the Shares to the Holder in
exchange for an amount that, together with all amounts paid to the Holder
pursuant to Section 5(b) hereof, does not equal or exceed the sum expressed in
Section 5(a) hereof, the Maker shall not be personally liable in respect hereof
for any additional amounts.
6. Notices. Notices of prepayment and all other notices to be given to
the Holder shall be given by overnight U.S. registered mail (return receipt
requested), overnight courier, or telecopier to the Holder at 102 Pickering Way,
Exton, Pennsylvania 19341, or at such other address as the Holder shall notify
the Maker thereof in writing.
7. Waivers. The Maker, to the extent permitted by law, waives and
agrees not to assert or take advantage of any of the following: (a) acceptance
or notice of acceptance of this Note by the Maker; (b) presentment and/or demand
for payment of this Note or any indebtedness or obligations hereby promised; and
(c) protest any notice of dishonor with respect to this Note or any indebtedness
or performance of obligations arising hereunder.
8. Exclusive Jurisdiction. Maker agrees that any action or proceeding
against him to enforce the Note shall be commenced in state or federal court in
the County of Chester in the Commonwealth of Pennsylvania, and Maker waives
personal service of process and agrees that a summons and complaint commencing
an action or proceeding in any such court shall be properly served and shall
confer personal jurisdiction if served in accordance with the notice provisions
set forth herein.
9. Severability. In the event that any provision of this Note is held
to be invalid, illegal or unenforceable in any respect or to any extent, such
provision shall nevertheless remain valid, legal and enforceable in all such
other respects and to such extent as may be permissible. Any such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Note, but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
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10. Transfer, etc.; Successors and Assigns. Neither the Maker nor the
Holder may assign or delegate any of its rights or obligations (as the case may
be) under this Note, except that the Holder may assign this Note to any
subsidiary or affiliate thereof.
11. Captions. The captions or headings of the paragraphs in this Note
are for convenience only and shall not control or affect the meaning or
construction of any of the terms or provisions of this Note.
12. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without reference
to conflict of laws principles.
IN WITNESS WHEREOF, the Maker has duly executed this Note the day and
year above first written.
Witness
/s/ FERNANDO C. COLON-OSORIO
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FERNANDO C. COLON-OSORIO
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